Legislature ends sweeping requirements on fund disclosures

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The Legislature has abandoned its effort to make the MBTA retirement fund follow disclosure and ethics rules that apply to other pensions for public workers, repealing a law passed just a year ago to open the normally secretive operation to greater scrutiny.

Lawmakers accepted two narrower measures instead. They will require the MBTA to disclose the names of its retirees and their pension benefits online, as other state agencies already do.

The pension fund for transportation workers was set up decades ago as a private trust, even though the Massachusetts Bay Transportation Authority itself is a public agency. Pension officials have cited the fund’s private status, upheld by the state’s highest court in 1993, when they resisted the measure enacted a year ago.

Critics of the law said it was too vague and fell short of challenging the pension fund’s privacy claims.

Still, Iliya Atanasov, a senior fellow on finance at the Pioneer Institute, a Boston think tank that has been critical of the MBTA pension board, said that rolling back the law was tantamount to defeat for those who wanted to bring more scrutiny to the board.

“I thought they would come up with a much more meaningful package,’’ Atanasov said. “The real issue is that the fund’s governance is broken. Until that is fixed, it’s going to be the same cycle of conflicts and losses and scandals every few years.’’

The pension fund has received heightened scrutiny since December, when
the Globe reported that the fund had lost $25 million on a hedge fund investment recommended by its former executive director.

The relationship was not disclosed in the fund’s 2008 annual report. Nor was the total loss disclosed when the hedge fund, run by Fletcher Asset Management in New York, went bankrupt in 2012.

State Senator William N. Brownsberger, a Belmont Democrat, had championed the law last year but is helping to reverse it now.

He said he believes the two new requirements will improve the pension fund’s transparency.

“The information that the public most wants to know – namely, who’s getting public pensions and how much — will be on the state’s website as a result of this new legislation,’’ Brownsberger said.

In addition, he said, those who want to know more about the financial workings of the fund “will have a much better window into it with a new, high-quality annual report.’’

But many things will probably be missing from that report. For instance, officials could not say whether executive pay at the retirement fund would be disclosed, or whether the reports will give more detail about the fund’s investments.

By contrast, the $60 billion pension fund for state workers holds regular public meetings, discloses the pay of its top employees, and updates its investment returns monthly.

Brownsberger’s original version of the 2013 bill requiring greater disclosure had specifically named the MBTA pension board. The final version, authored by Mattapoisett Representative William Straus, did not. Yet when it passed, 153-0, Straus hailed a measure to “open the MBTA’s long secretive pension plan to public scrutiny.’’

The eventual law also did not name the MBTA pension plan.

Lawyers for the MBTA have maintained that the law does not apply to their pension fund. Even if it had included the authority by name, lawyers and half the pension fund board believed the law did not supersede the fund’s private trust status. The state’s supervisor of public records agreed with that position when the Globe and other news outlets requested public records.

The Globe recently filed a suit, citing the law, in an effort to obtain records about the pension fund.

Governor Deval Patrick, who is reviewing the budget bill that includes the repeal, was in favor of last year’s law requiring more disclosure. His three appointees to the authority, who in turn serve on the retirement board, voted to follow the new law. But the other three board members disagreed, voting instead to wait for a legal review.

James M. O’Brien, president of the Boston Carmen’s Union and a member of the pension board, said the directors are charged with guarding the privacy of their members. But it was the union that approached the T to work on ways to improve disclosure, he said, which resulted in plans for the new annual report.

“Through collective bargaining, the union made a proposal for more transparency,’’ he said.

Brownsberger said the Legislature will have to stay “in touch with the process” to be sure it results in a clearer picture of the pension fund’s finances. “I think we’re going to have a very good view into the integrity and operations of the MBTA retirement fund,’’ he said.